Mr. Speaker, it is a great privilege to speak in the budget 2008 debate.
Our budget builds on the strong performance of our country and its government in recent years. It also prepares us for the realities of slower economic growth. The measures that we took in the fall economic statement ahead of the curve are helping to cushion the country's economy in a responsible and balanced way that will keep our economic fundamentals strong.
Canada has come a long way from the volatile economic times we experienced in the seventies and eighties, with high inflation and interest rates, high taxes and burgeoning public debt at both levels of government. However, lessons were learned and eventually, with a lot of pain and hard work by governments, businesses and, indeed, Canadian families and workers, we emerged to see a country on the strongest footing we have enjoyed since the 1960s.
We are a stronger trading nation, a more educated nation, a nation that is investing in research and the knowledge economy, a nation that is investing in public infrastructure and a nation that puts its provincial partners on a fairer, predictable funding base.
Taxes are lower than they have been since the 1960s. Inflation and interest rates are low and stable. Public debt is tracking to its lowest rate against GDP in my lifetime. The Canadian dollar is strong. We know that poses some challenges, but the stronger dollar reflects our stronger position in the world, and that is something in which we should take some pride.
As a result of our careful financial stewardship, the economy is in good shape; Canadians are working hard, paying their taxes and raising their families; 400,000 new jobs have been created in the past two years and unemployment is at its lowest level in 33 years.
We are well positioned to cushion the slowing down of the global economy, a position that augers well for the future. In fact, the only sure thing we know looking forward is that once the U.S. gets back on a stronger growth curve, and it will, from time to time events will occur in the world that may impact Canada's economy negatively. We have seen them before: the weakening of Asian capital markets, 9/11, the tech bubble, SARS, BSE, and now the U.S. slowdown after what was a long and sustained growth period.
The very best way for Canada to withstand these pressures, which are for the most part outside our control, is to keep our economic fundamentals strong and competitive. That approach will attract investment and keep jobs in Canada, keeping the opportunity for Canadian families to improve their incomes and indeed improve their standard of living against any measure.
For these reasons, I have been very surprised and quite frankly concerned at the nature of political discussions in this place during the weeks leading up to the budget and even recently. We had opposition members calling for major government interventions as if to somehow backstop the U.S. slowdown, believing that Canada somehow could spend its way to preventing a recession south of the border.
It is actually quite bizarre. Those members seem to favour going back to the days of higher taxes, bigger government handouts and the kinds of interventions that played havoc with our economy before and would surely help get us in trouble again.
We cannot go back. We will not go back. Budget 2008 builds on the already proper and successful approaches we have taken in budgets 2006 and 2007 and last fall's economic statement. It also falls directly out of the most masterful and visionary economic plan this country has seen, certainly in all my years, and that is the “Advantage Canada” plan introduced in November 2006.
It gives us the advantage so that as the world changes, and it will, Canada can continue to be more prosperous and strong. It is realistic. It is practical.
It will give Canada and Canadians a competitive advantage: a tax advantage with the lowest rate on business investment in the G-7; a fiscal advantage by reducing our debt and leaving the next generation on a stronger foundation; an entrepreneurial advantage by making Canada a good place to do business, one with less red tape and paper burden; a knowledge advantage, improving skills and awarding excellence in education and research; and finally, an infrastructure advantage, with the most robust investment in public infrastructure we have seen since the second world war.
As parliamentarians we are given the responsibility to shape public policy and public expenditures so that all Canadians have access to a better quality of life. “Advantage Canada” and its five pillars and our last three balanced budgets aim directly at achieving advantage for all Canadians.
For the benefit of those tuned in from my riding of Simcoe North and for all viewers this afternoon, I would like to take just a moment to highlight some of the key improvements in our budget 2008 that speak directly to Canadian advantage.
To help all Canadian families and seniors protect their savings and maximize their incomes, we have introduced the first major innovation in Canadian savings policy since the RRSP in 1957, and 1957 was a very good year. This is the new tax-free savings account. From age 18 on, Canadians can now put up to $5,000 per year into a savings account and the earnings will grow in that account tax free. If the whole $5,000 cannot be used in one year, the unused portion can carry forward for future use.
For the heart of the manufacturing economy in Simcoe North, especially in Penetanguishene, Orillia and Midland, we have extended the accelerated depreciation allowance for another three years on a declining scale so that new capital equipment can be written off more quickly to save taxes and to invest more.
We know that the future health of our manufacturers requires new investment in the kinds of machines and tools we will need to compete with the very best in the world. Our government is helping to do that. It does not hurt that those purchases can now be made with a more valuable Canadian dollar.
This is on top of a new $250 million automotive innovation fund that will help our automotive sector invest in the kind of green, fuel efficient products that are certain to the lead the market in this new economy and develop the kind of tooling and systems needed to keep Ontario the very best place in the world, as we know, to assemble automobiles.
To expand our knowledge advantage, we are helping 245,000 college and undergraduate students a year with a bigger and better Canada student loan program, with $350 million by 2009-10, rising to $430 million in 2012-13.
For the many seniors in Simcoe North and across Canada, in addition to the tax savings we have brought in from bigger tax credits, smaller tax rates and pension splitting, budget 2008 gives those seniors who have some extra earnings the ability to declare up to $3,500 per year of earned income before which their GIS would be affected. It used to be that anything over $500 was clawed back from the GIS, but not any more.
On the infrastructure front, the gas tax transfers that flow to our municipalities and will reach a record level in the next fiscal year will now be permanent, dependable and predictable transfers directly from the Government of Canada to help with municipal infrastructure improvements. We had extended that gas tax funding in budget 2006 to 2014, but now it will not stop. This measure will add an additional $4.5 million per year for the eight municipalities in Simcoe North.
For law enforcement and police services, and indeed to keep our communities safer, budget 2008 commits $400 million for the hiring of 2,500 new police officers. The share for Ontario policing will be $156 million to help with Ontario police forces and services.
Finally, in five cities across Canada, there is some groundbreaking work under way by the Mental Health Commission in a program that will see some $110 million spent to develop best practices and a new model for dealing with Canadians facing homelessness that is occasioned by mental illness.
Those are some of the highlights of budget 2008 in which I know the people of Simcoe North will take an interest. It is a tremendous honour to serve the people of my riding. I am proud to serve them as part of a government that is taking strong, decisive action to bolster our economy even in the face of uncertain economic times.
I thank my colleagues for their attention, and I now invite them to ask me questions.